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DECISION No. 149/2003/QD-TTg OF JULY 21, 2003 ON A NUMBER OF POLICIES AND MECHANISMS TO ENCOURAGE THE DEVELOPMENT OF VIETNAM’S SEA-GOING FLEET

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the Vietnam Maritime Code of June 30, 1990;

Pursuant to the Government's Resolution No. 02/2003/NQ-CP of January 17, 2003 on a number of major undertakings and solutions for the performance of the 2003 socio-economic development tasks, which require concentrated direction;

Proceeding from the comments of the ministries and branches at the February 24, 2003 meeting;

At the proposal of the Ministry of Communications and Transport in Report No. 1754/TTr-BGTVT of April 29, 2003 and the Justice Ministry's evaluation comments in Official Dispatch No. 360/TP-HTQT of May 30, 2003,

DECIDES:

Article 1.- Scope and objects of application

This Decision prescribes a number of policies and mechanisms to encourage the development of Vietnam's sea-going fleet, and at the same time promote the transportation of import and export goods by Vietnamese shipping enterprises.

Article 2.- Interpretation of terms

In this Decision, the following phrases are construed as follows:

1. "Vietnamese shipping enterprises" mean enterprises set up under the State Enterprise Law or the Enterprise Law, which have sea-going ships registered to fly the Vietnamese flag.

2. "Goods originating from the State budget" mean the goods lots procured by financial sources originating from the State budget, the Government's loans, foreign aid provided to the Government, or the Government's goods as debt repayment to foreign countries.

3. "Goods being national natural resources" mean the goods lots belonging to the natural resources exploited in Vietnam, including crude oil, pit-coal, clinker and other minerals which organizations and individuals are permitted to export.

4. "Domestic transportation" means the transportation of passengers, cargo, supplies, equipment, raw materials, fuel and materials by sea-going ships between seaports within the Vietnamese territory.

Article 3.- A number of mechanisms to support Vietnamese shipping enterprises

1. Regarding cargo transportation:

a/ For export and import goods with financial sources originating from the State budget, Vietnamese shipping enterprises shall gain the right to transport them, except otherwise provided for by the international treaties which Vietnam has signed. In cases where Vietnamese shipping enterprises are incapable of transporting the above-said goods, they may use foreign sea-going ships to transport them according to the provisions in Article 5 of this Decision.

b/ For domestically transported goods, Vietnamese shipping enterprises shall be given priority to transport them, except otherwise provided for by the international treaties which Vietnam has signed. In cases where Vietnamese shipping enterprises are incapable of transporting such goods, they may use foreign sea-going ships to transport them according to the provisions in Article 5 of this Decision.

c/ Vietnamese shipping enterprises shall be prioritized to transport goods being national natural resources, except otherwise provided for by the international treaties which Vietnam has signed.

2. A number of financial supports:

a/ For ships hired by mode of bareboat charter and time charter, shipping enterprises shall be exempt from income tax within the contracts' terms.

b/ For ships loan-purchased or hire-purchased, shipping enterprises shall be exempt from income tax for the first 02 years after taxable incomes are generated and entitled to 50% reduction of the payable tax amount for the 02 subsequent years.

c/ Vietnamese shipping enterprises shall be entitled to borrow preferential credits from the Development Assistance Fund in order to develop their flotilas fleet according to the current regulations.

d/ For Vietnam National Shipping Lines (VINALINES), apart from the application of the provisions at Points a, b and c above, annually (in the period from 2003 till the end of 2005), it shall also be entitled to the following preferences:

It shall be apportioned with adequate capital by the Development Assistance Fund and may retain the whole amount of annual enterprise income tax of its member units, including VINALINES' income tax amounts in joint-venture companies and joint-stock companies attached to it, which shall be considered the additional budget allocation for use as reciprocal capital for borrowing capital from the Development Assistance Fund in order to perform contracts signed with Vietnam Shipbuilding Corporation for the building of 32 new ships according to the plan already approved by the Prime Minister.

3. In cases where domestic shipyards are incapable of meeting the demands, or when the Development Assistance Fund is incapable of providing loans for the implementation of domestic shipbuilding projects, Vietnamese shipping enterprises may purchase foreign sea-going ships according to the current regulations.

4. Foreign investment licenses shall not be granted for the establishment of joint-venture companies or business cooperation contracts for sea transportation when the Vietnamese side contributes less than 51% of the legal capital, except otherwise provided for by the international treaties which Vietnam has signed.

5. Vietnamese shipping enterprises shall have the responsibilities:

a/ To efficiently use self-mobilized financial sources and financial sources provided as preferential loans in order to attain the objectives of developing Vietnam's sea-going fleet with a view to step by step increasing the Vietnamese sea-going fleet's market share for transportation of import and export goods.

b/ To take measures and commit to fully perform its responsibilities strictly according to the contracts signed with the goods owners in strict accordance with law provisions and international practices, and apply the freight levels competitive to the average levels in the region.

Article 4.- A number of financial supports for goods owners using sea-going ships of Vietnamese shipping enterprises

1. Owners of the goods lots imported and exported under FOB purchase or CIF sale contracts (regardless of their financial origins), that sign transportation contracts with Vietnam's sea-going fleet, shall be considered for the reduction of export tax or import tax. The Ministry of Finance shall specify this matter.

2. Owners of the export goods lots currently eligible for 0% tax rate, that sign transportation contracts with Vietnam's sea-going fleet, shall be considered for freight support from the Export Support Fund.

Article 5.- Transportation of domestic goods and goods originating from the State budget by foreign sea-going ships

For the transportation of domestic goods and goods originating from the State budget, when Vietnamese sea-going ships are incapable of transporting them, the Ministry of Communications and Transport shall permit the use of foreign sea-going ships according to the following process:

a/ Goods owners or Vietnamese shipping enterprises shall send their written requests to the Ministry of Communications and Transport, clearly stating the reasons for the use of foreign sea-going ships;

b/ Within 15 days after receiving the written requests from the goods owners or Vietnamese shipping enterprises, the Ministry of Communications and Transport shall issue documents, permitting or not permitting (clearly stating reasons therefor) the use of foreign sea-going ships for the transportation after consulting with Vietnam Ship Owners' Association.

Article 6.- Responsibilities of the ministries and branches

1. The Ministry of Communications and Transport:

a/ To assume the prime responsibility and coordinate with the concerned ministries and branches in scrutinizing and taking measures to overcome and redress cases of violating the regulations of the Vietnam Maritime Code and the current regulations on goods transportation by sea along domestic routes.

b/ To assume the prime responsibility and coordinate with the concerned ministries and branches in reviewing and proposing the amendment and/or supplementation of legal documents, ensuring the synchronism and effectiveness in encouraging Vietnam's fleet to develop and quickly occupy market for transportation of domestic, import and export goods under the conditions of international economic integration; and at the same time assume the prime responsibility and coordinate with the concerned ministries and branches in studying policies to encourage the importing and exporting enterprises to use transportation services provided by Vietnamese shipping enterprises.

c/ To elaborate and promulgate or submit to competent agencies for promulgation the regulations related to the management of freights as well as maritime service prices and charges.

d/ To direct Vietnam National Maritime Bureau to make statistics, monitor and detect for timely handling according its competence or report to competent authorities for handling the cases of contravening the provisions in this Decision.

e/ To direct Vietnam National Maritime Bureau to examine and supervise maritime transportation and service enterprises in the implementation of the provisions in the Government's Decrees No. 57/2001/ND-CP of August 24, 2001 on sea shipping service business and No. 10/2001/ND-CP of March 19, 2001 on maritime service business, and those in this Decision, in order to establish order and a healthy business environment, ensuring the interests of Vietnamese shipping enterprises and the national interests in the above-said domains.

2. The Ministry of Finance:

a/ To guide and direct its attached agencies and guide enterprises in implementing the regulations in Clause 1, Article 4 of this Decision.

b/ To coordinate with the Ministry of Trade in implementing the regulations in Clause 2, Article 4 of this Decision.

c/ To coordinate with the Ministry of Planning and Investment and the Ministry of Communications and Transport in implementing the regulations at Points a, b and c, Clause 2, Article 3 of this Decision.

d/ To guide and direct Vietnam National Shipping Lines in managing and using efficiently the financial amounts mentioned at Point d, Clause 2, Article 3 of this Decision for the right purposes.

3. Vietnam Ship Owners' Association:

a/ To coordinate with the Ministry of Communications and Transport, the Ministry of Trade and relevant agencies in providing information on import/export goods transportation market for Vietnamese shipping enterprises.

b/ To coordinate with the concerned agencies in assisting Vietnamese shipping enterprises to step by step increase the market share for import/export goods transportation.

c/ To advise the Ministry of Communications and Transport on studying policies to encourage the importing and exporting enterprises to use the transportation services provided by Vietnamese shipping enterprises.

d/ To closely coordinate with Vietnam National Maritime Bureau and relevant agencies in detecting cases of contravening the regulations in this Decision and other relevant regulations, report such to Vietnam National Maritime Bureau or competent authorities for timely handling measures according to law provisions.

Article 7.- Implementation provisions

1. This Decision takes effect 15 days after its publication in the Official Gazette.

2. The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People's Committees of the provinces and centrally-run cities, the Director of Vietnam National Maritime Bureau, the Chairman of the Managing Board and the General Director of Vietnam National Shipping Lines, other relevant corporations and the Chairman of Vietnam Ship Owners' Association shall have to implement this Decision.

For the Prime Minister

Deputy Prime Minister
NGUYEN TAN DUNG